Home Loans 101

Mortgage Review

In order to help you with your next home purchase, I have put together a simple review of some of the major mortgage programs:

Variable or Adjustable-Rate Real Estate Mortgages

With an adjustable rate mortgage, the rate of the loan can change throughout the term of the loan. Many ARMs have a short fixed period and then become truly adjustable. The rate of the loan is based on adding points to a fixed base.

Fixed-Rate Real Estate Mortgages

In this type of loan the interest rate stays the same throughout the term of the loan.

Balloon Real Estate Loan

A balloon loan is a real estate loan where there is a lump sum due at the end of the loan. This normally encourages an individual to refinance prior to the end of the term of the loan.

Jumbo Real Estate Loan

A Jumbo Loan is any residential or commercial loan exceeding the guidelines of Fannie Mae and Freddie Mac.

FHA Real Estate Loan

An FHA loan is a loan in the United States that is insured by the Federal Housing Administration.

VA Real Estate Loan

A VA Loan is a loan in the United States guaranteed by the Veterans Administration. The loan may be issued by qualified lenders. The VA was designed to offer long-term financing to American Veterans or to their surviving family members.

Hybrid Loans

A Hybrid loan combines a fixed period along with an adjustable component. Usually these loans are fixed for a period of time and then the loan becomes adjustable where it is dependent on current rates.

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